Hello
I am not writing this message, as a professor but as a observer. Further many things change from student to student, i am writing this message taking into consideration , average student in audit and experience of more than 10 years in teaching.
Across the year i am flooded with students asking me simple question why I didn’t clear audit or why I scored less in audit?

  1. Self Study

There is no substitute to self study, you are sole performer in exams, there is no support of anyone when you write paper. So you need to understand, you need to remember you need to write. you need master subject. Quantum can change depending on grasping power, memory power and ability to concentrate for long number of hours.

2. Volume
Audit is voluminous subject 22 chapters, out of which one chapter includes 45 standards , Module & Notes are generally between 800-1000 pages + around 591 questions in PM (Old Course , As all chapters of new course module & pm are not released)

3.Tricky
It includes variety it includes different types of entities right from General Insurance / Stock Exchange / Mutual Fund / Co-Operative / Bank Audit etc . Different types of Assignments Tax Audit / PSU Audits etc
SAs offer altogether different world of auditing.
Now Articleship offers limited exposure in 1 or 2 areas, and way we do auditing is different from SAs. This makes subject challenging to understand.

4.Results
As per estimates if 100 people fail in group 1 ,60-70% because of audit. I have seen group leaders doing audit of listed companies scoring 28 and giving multiple exams to clear audit subject.

5.Different from Practical & Law
Theory subjects like Audit (800-1000 pg) & ISCA (300 – 400 pg) are challenging because it is 50% understanding and 50% retention. In practical it is 80% understanding 20% retention. Further practical and law are good as we can compare and differentiate different methods and sections. In audit & isca there are plenty of factors for each step of point, and points look similar to other topics. So it becomes big challenge to differentiate / retain and reproduce. IPCC Grp2 results were low, one of the reason was 2 deadly subjects of audit and ITSM in one group and also Articleship pressure.
Only overall / raw understanding of topic is not going to fetch marks, understanding each factor and retaining it and reproducing it is important thing.

6.Student perception & approach
They allocate one week to 20 days for the subject and some may allocate 40 days also. So that goes to 800/40 = 20 pages. Reading / Understanding / Research Behind Topic / Hunting Examples / Thinking about retention techniques and doing writing practice. That too few hours in hand many times because of Articleship

7.Is doing classes a bad thing?
I was a rankholder I went for all subject classes and I guess same is the case with many other rankholders and CAs. In this world, where we have less time we need apt guidance to make ourselves efficient & effective. We go to gym, we go for trainer so that in less time we get our body healthy. Further how much it costs to for class 5000-8000, if there is financial problem, people may help you out. What you gain is knowledge , techniques which saves your time, gives more time for overall studies and increases your probability of clearing exams drastically.

Solution
Go for proper class / lecture 120 – 150 hours. Do regular self study for 80- 100 hours. Use all examples . charts , techniques provided . do revision / writing practice you are prepared for exams. Never ever do preparations in haste, it will cost you few attempts,  because once you prepare it defines your understanding , depth attitude and approach towards subject. Then its very difficult to change it unless you give loads of time.
Lectures + Notes + PM + RTP should be the Study Plan

Conclusion
You need to assess yourself, scores of ipcc audit cannot be base, I meet n number of students who scored exemption in ipcc audit and now struggling to clear ca final audit for 3-4 exams. You can assesses whether you can clear it with self study.
Read SA 300 series / 400 Series / EDP / General Insurance and write down then attempt questions from PM it will be good taste.
Our books are designed in such a way that they are effective along with live lectures or videos, because we follow notes extensively as we teach.

Please be open to share your thoughts, will take it in consideration

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Can CA in Practice do Business Through HUF?

Students and Professionals generally both have curiosity to know whether HUF route is open for doing business for CA in practice. People feel restricted when they realise technically they cannot do business along with practice.

So here is GIST of the matter – CA in practice can be member of HUF, where business is being carried. But he cannot be karta of HUF or Representative of HUF for business. If he is karta / representative, then specific permission will be required and their he will have to prove that he is not actively engaged in business , but then he will be considered to be in part time practice.

Further if business comes to him as share of HUF because of his relation then also above thing will be applicable.
If it would have been allowed, it would have been big loop hole which all CAs would have happily implemented. Practically everything is fine till we or anyone inform ca institute, there is no mechanism to detect it.

Requirement under Regulation 190A
Permission to be granted specifically:
Members of the Institute in practice may engage in the following categories of business or occupations, after obtaining the specific and prior approval of the Council in each case:-

  • Interest in family business concern or concern in which interest has been acquired as a result of relationship and in the management of which no active part is taken.
  • Above Specific Resolution would be equally applicable to member carrying out the activities referred to therein in his capacity as Karta/representative of HUF provided he is not actively engaged in carrying on such activities.

 

Past Cases
1. Where a Chartered Accountant acted as karta of a Hindu Undivided Family (HUF) without taking prior permission of the Council. Held that he was inter alia guilty of professional
misconduct under the clause.
(B.L. Asawa, Chief Manager, Punjab National Bank, Delhi vs. P.K.Garg – Page 728 of Vol. IX – 2A – 21(4) of Disciplinary Cases – Council’s decision dated 16th to 18th Sept. 2003)

2. Where a Chartered Accountant was Karta of the HUF and was engaged in the business of a firm without permission of the Council. Held that he was guilty of professional misconduct under the Clause.
(V. Krishnamoorthy vs. T.T. Krishnaswami – Page 192 of Vol.VII(2) of Disciplinary Cases – Council’s decision dated 27th to 29th September, 1992)

3. A member as a Karta of his Hindu Undivided Family entered into partnership business for a short period with non-Chartered Accountants for engaging in business other than the profession of Chartered Accountants, without prior permission of the Council. Therefore, he was found guilty in terms of clauses (4) and (11).
(R.D. Bhatt vs. K.B. Parikh – Page 191 of Vol. VI(2) of Disciplinary Cases – Decided on 15th, 16th and 17th December, 1988)

4. While applying for membership and Certificate of Practice, a Chartered Accountant did not report that he was a partner in his family business. Held that he was guilty of professional misconduct within the meaning of the Clause.
(Baijnath Agarwalla vs. Gopinath Aggarwalla – Pages 426 of Volume VIII (2) of Disciplinary Cases – Council’s decision dated 26th to 28th August, 2001)

CA Ravi Taori
ravitaorisir@gmail.com

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Hello Everyone, here we are going to discuss a very controversial topic. I will try to be unbiased as I was an article of one of the Big4s. First of all, I have huge respect for them. They are one of the biggest employer and recruiters of Chartered Accountants, employing nearly 1,60,000 CAs. They are trend setters in quality & methodology of work. They are known for their professionalism, but some disturbing facts about them cannot be ignored.

Concentration of work & power By Big4s Worldwide

Recent Study shows that Big4s have captured 80% to 90% of audit revenue worldwide. Whereas in Asia pacific region the revenue of big fours was 21.49 billion US $ in 2017. The European Union want to break up this oligopoly of big4s. As they are getting bigger and powerful, they have access to loads on information, they are in dominating position. This is anti-competitive. In India they have acquired many midsized firms again to become bigger and powerful.  Many Central Council Members are from Big4s and some are indirectly supported by big4s. No wonder you don’t see any action against them from ICAI even after Sataym & GTB scams.

 

Are they Legal, is big debate?

Foreign firms and professionals cannot directly practice in India as per CA Act and give Audit Services. As Indian firms cannot directly function in foreign countries they cannot function in India as per Sec 29 of CA Act. Audit constitutes more than 50% of there total revenue worldwide.

 

So, they took help of Indian Chartered Accountants, created firms with all Indian CAs as partners. Like EY created SR Batliboi & Co, KPMG created BSR & Co further Big4s are on acquisition spree. PWC acquired Dala & Shah and so on. Now these Indian firms have their offices with foreign brands, they work closely with corresponding consulting companies, they cross sell services to clients, they share systems & software’s with them. They are virtually integrated with them. They pump money in these Indian firms. PWC Netherland gave 41 crores as interest free loan to PWC Kolkata partners who in turn, introduced it as capital and then acquired Dalal & Shah. PWC has given around 240 crores to Indian affiliate firms. PWC has indemnity insurance policy of 280 crores which is collectively used by all sister firms which again shows. They are virtually one only legally different. If they are doing so much they must be getting something in return in the form of charges for these services. So basically, they have full control of these Indian firms and in short, they are indirectly practicing in India. It is clearly killing of spirit of law created. They are violating Sec 25 CAs creating corporates for accountancy services, Sec 29 doing practice in India when we cannot do it in US or UK. Advertisement Clause / Sharing of Fees Clause. Open many websites and you will find ads from Big4s.

 

Impact of Indian CA Firms

Indian CA firms are muscled out with financial and tactical powers of Big4s. It is killing entrepreneurship of Indian CAs. Reducing their revenue and profits, these profits go to Big4s and to their foreign headquarters. They are not entertained for big assignments, even many government contracts are bagged by them.

Some Indian CAs are fighting against these powers through legal and other modes. But it will need a lot to bring a change. Reliance Industries always employs Indian firms as joint auditors. Modiji said we want our Indian firms as big4s.

It affects India as nation also, all crucial information about companies, economy is indirectly available to foreign controllers.

Video on above article

https://www.youtube.com/watch?v=FUZCld0HXeY

Legal Proceeding and Judgements:

Please refer the below link for Supreme Court latest Judgement on the issue discussed above:

https://sci.gov.in/supremecourt/2013/35041/35041_2013_Judgement_23-Feb-2018.pdf

Further Detailed discussion:

The above issue regarding MAF’s V/s ICAF’s and decision of the Supreme Court has required a detailed study of every aspect of allegation and violation.

For detailed study Please refer the link:

https://1drv.ms/b/s!AqxpYGo5-Bccg4BEuY0RWECk70Ngfg

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